PPRuNe Forums - View Single Post - Mysterious JetBlue aircraft lease rates
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Old 20th Mar 2004, 09:50
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Boss Raptor

 
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Very simply it sounds like he has done a 'low-high' deal on his Lease or Lease-Finance payments. This is quite common especially with start ups and basically is what it sounds, you pay lower than the expected/required lease rate in say first 3 years and then this has to increase to above for the remainder of the lease period to pick up the shortfall...the advantages are decreased costs in the early years...however you then can be caught if your business has not increased as expected laterly to support the 'high' lease rate progression

If his revenues/profits have increased with expectations then this should be accounted for and make little difference to the stock price...if not then it will have the potential to knock the profits considerably and so knock the stock price
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